Three Of My Favorite Dividend Stocks For 2017

BlackRock, Inc. (NYSE:BLK)

Business Model:

BlackRock, Inc. (NYSE:BLK) is THE asset manager in the U.S, with the largest market share (Assets Under Management) with its iShares division. With over $1 trillion invested in its ETFs, Blackrock shows more than double the AUM of the second place State Street Corp. Considering investors’ growing appetite for ETFs; this is definitely an interesting economic moat to develop.

Main Strengths:

BlackRock has built a solid reputation throughout the years and the recent shift in the financial industry requesting more affordable investing vehicles for the masses is opening the door wide open to the world’s largest ETF creator. Blackrock has also built a strong mix of fixed income and equity products, enabling them to simply offer a different product to their clients instead of seeing them sell their position and staying in cash.

Potential Risks:

The thing with financial companies is that they could always evolve around complex products that could lead to bad surprises. Hopefully, new regulations for more transparency will avoid such situations with BlackRock. In the event of any market mood swings, Blackrock’s stock price is likely to fluctuate. However, those risks are nothing to worry about if you are in for the long-term.

Dividend Growth Perspective:

BlackRock, Inc. (NYSE:BLK) has been a steady dividend payer for some years now. The company has successfully increased its dividend payouts for the past 6 consecutive years while maintaining a payout ratio under 50%. The company is generating sufficient cash flow to continues its streak for several years to come.

Investment Thesis:

BlackRock, Inc. (NYSE:BLK) is a leader in its industry and has built a solid relationship with its clients. They offer a wide variety of investing products going from fixed income to equity. BlackRock shows a great combination of stable business model (due to the size of its assets under management) and growth potential (as more institutions are looking for low fees investment solutions). As we are bullish for 2017, we see Blackrock getting more net inflows of cash to its investment offerings.